Greetings ICONists! I have posted the following clarification of our long-term rewards policy in many different Telegram channels over the past several weeks. This is a copy and paste of information I’ve posted for the past few weeks (since before pre-vote). The information can be seen in section 2:
Section 1: highlights
We strongly believe that the price of ICX matters, both in the short and long-term. Higher price draws more positive attention, attracts more people (developers, users, investors, etc.), and enables P-Reps to do more with less ICX (e.g. at $2 ICX value, you can accomplish the same monetary efforts with 10% less ICX than at $0.20 ICX value).
We are working hard on ways to help restore investor confidence, while also building for the long-term with technical development, business development, and content creation / marketing. It is common to incentivize investments for longer periods of time, and we believe ICON should offer this as well as it helps to stabilize ICON through network stability and price (more staked = less ICX on exchanges to sell).
The support for this idea continues to grow, and we thank everyone who has shown support for this. Long-term rewards will be most beneficial if applied across all of ICON to all ICONists. As such, we have always stated that our end goal is to push for implementation of these rewards into IISS and not just have them available to voters of Ubik (see #5). This would be most beneficial for all of ICON. Unfortunately, we cannot provide significant incentive to all ICONists on our own, and that is why we have implemented this into Ubik policy first (a policy we control and voters can directly support). Long-term, this needs to move to IISS to be beneficial for all ICONists to be effective. With enough support, we may be able to bypass much of the research and accelerate development and implementation for all. We need to be 100% confident that the direction moves in a way that our voters have shown support — incentives for long-term staking rewards provided to all. We have full control of our policy and have implemented this for Ubik. We hope other P-Reps join us and support this initiative and we can implement into the greater ICON network — many have shown support already.
The incentives we propose to IISS would be along the lines of a growing reward % as ICX is staked for longer. An example distribution could be as follows (with actual numbers based on 15% rewards). This rate would be based on staking time, thus allowing moving votes without penalty.
Less than 1 Month = 0.5 * reward rate (7.5%)
1–2 Months = 0.75 * reward rate (11.25%)
3–4 Months = 0.9 * reward rate (13.5%)
5 Months = 1 * reward rate (15 %)
6 Months = 1.1 * reward rate (16.5%)
7–8 Months = 1.25 * reward rate (18.75%)
9–10 Months = 1.4 * reward rate (21.0 %)
11+ Months = 1.5 * reward rate (22.5%)
Lastly, to make clear where we stand: we are against reward sharing with no benefit to ICON (#1). Giving 80% of rewards away is detrimental to ICON success. We are on-board to vote against this type of behavior through ICON Governance.
Section 2: Copy and paste of clarification text
We have received and carefully considered good feedback on our reward system. Specifically, rewarding users who stake for 6 months with sharing 50% of our profits. The bottom line is there is no definitive data to both the value, expected participation rate, and behaviors of users staking for long-term- including the differences in staking habits of user’s are rewarded for long term staking compared to those who receive the same reward, regardless how long they stake. We believe long-term staking is beneficial for icon network. Our hypothesis is that users will be more apt to stake long-term if they receive higher rewards. There is no quantitative data to confirm our hypothesis. We would like users to be rewarded more with long term staking as part of the ICON IISS structure, however, such an impactful proposal deserves thoughtful research and quantitative and conclusive results.
We have ICON’s best interest in mind with this proposal and believe long-term staking helps ICON through lowering supply and increasing network efficiency through more icx staked long term in a stable manner with less fluctuation. In order to be completely transparent,we want to outline exactly where we stand on the topic of reward sharing, our support of long-term staking, and our research initiative:
1. We think additional rewards by P-Reps without specific targeted areas of interest to help ICON is harmful to the ecosystem, creates disparity in voters and p-reps, and we do not support this behavior.
2. We believe ICONists should be incentivized to stake long-term, earning less icx for shorter staking periods and more for longer. Otherwise, we believe ICONists would all stake for the shortest time, leaving potential for fluctuation of staking numbers and also the sell side supply of icx.
3. Since there are no rewards, we took it upon ourself to offer 50% of our profits back to voters who stake for 6 months. We estimate this will amount to anywhere from 3–5%, depending on our expenses, rewards, and the amount of ICONists who participate.
4. We will run this incentive for a 6 month period and compare results of those who stake with us for 6 months to other teams that do not offer this incentive.
5. In parallel we will work the shell of a proposal to introduce extended staking rewards to IISS, forming a curve of lower rewards for short staking and higher rewards for longer staking. Based on the results of the data, we will either propose this to ICONgress with quantitative data to support long-term staking rewards or we will present data showing there is no benefit to extended rewards (perhaps users already stake for extended periods). If implemented into IISS, then we will drop our proposal so that all ICONIsts can benefit.
Disclaimer: Not financial advice. Cryptocurrency and blockchain investments are high risk, can incur substantial losses, and are not suitable for everyone. Please consult a professional before considering investment in any cryptocurrency. This article does not encourage or support any specific investments, use of applications or technology, or financial direction. Opinions are my own. This article is for informational purposes only and should be verified and validated externally for 100% accuracy.